The prediction market platform Kalshi has made a bold move by filing an application with the U.S. Commodity Futures Trading Commission (CFTC) to approve two new perpetual futures contracts. These instruments are tied to the U.S. stock market and an industrial metal—copper. This signals that Kalshi aims to expand its presence beyond purely event-based betting, venturing into the traditional derivatives space.
The first contract, designated US500, will track the MerQube US Large Cap index, which covers the 500 largest U.S. public companies. In essence, this is a direct counterpart to the classic S&P 500, but with a key difference—the absence of an expiration date. The perpetual structure allows traders to hold positions for as long as they wish, fundamentally changing trading dynamics compared to traditional futures.
The second product, COPPERPERP, is tied to the spot price of copper, expressed in dollars per pound. Here, Kalshi uses a price feed from Pyth Network with the ticker XCU-USD. The choice of a blockchain-based oracle rather than a traditional exchange source underscores the hybrid nature of the platform, which seeks to combine the best practices of CeFi and DeFi.
If the CFTC gives the green light, this would set a precedent: Kalshi, known for its political and economic predictions, would effectively transform into a full-fledged derivatives exchange. However, regulatory risks should not be underestimated. The agency, led by Rostin Behnam, is demonstrating an increasingly stringent approach to crypto and derivative products, and approval of such contracts could be delayed or denied.
My analysis: Kalshi's attempt to enter the perpetual futures market is a logical evolution, but also a serious challenge. If the regulator approves these instruments, we will witness the emergence of a new class of assets traded outside traditional exchanges, potentially undermining the monopoly of CME and ICE. However, relying on a price feed from Pyth Network rather than its own quotes could become a vulnerability that the CFTC might use to reject the proposal. Keep an eye on this case—it will determine the future of regulating hybrid platforms in the U.S.